Thursday 30 November 2023
It's been a really mixed bag in the past 24 hours with general USD supply prevailing amid the month-end supply but we've seen some good two-way price action amid variable data and risk tones. One stand out though is a retreat in the Euro with softer CPI and growth data suggesting the end of rate hikes and bringing rate cuts next year firmly into play. I've warned a few times recently that FOMC cuts/rate capping wouldn't be unilateral and now we're starting to see that realisation play out.
Chinese PMI data came in softer which initially caused a bit of risk-off sentiment but then the expectation of looser monetary policy. The ongoing Middle East back-story sadly continues meanwhile and casts its own shadow over markets but still not driving prices. US PCE inflation data in focus today as well as weekly jobless claims. Last knockings for month-end USD selling but we can reasonably think a lot has been done already. Even so, some has to be done at the final 4pm London fix so keep that in mind.
Equities have been up and down yet again on the variable risk/data and looking a little soft in early European trading. WTI broke up through $77.00 after basing at $75.50 this time with OPEC+ meeting due to go ahead despite disagreements in preliminary talks. Sellers at $78.80 though with global demand concerns continuing. Gold has found a base at $2035 this time but failing into $2050 with strong technical resistance area just above.
GBPUSD: Holding 1.2650-60 and rallying into 1.2730 again amid the USD supply and EURGBP selling but still tempered by some GBPJPY supply and now testing the lows again. I remain poised for rally sells when momentum fades but caution still required
EURGBP: Support at 0.8620 this time after capping at 0.8650 amid the general EUR selling. Jury still out but rate divergence in play for the moment. GBPJPY: Capping at 187.50 and testing 186.20 this time amid softer risk tones but some core pair support still. Sellers remain poised.
EURUSD: Support now around the old 1.0920 support line after capping at 1.1000 and retreating on the general EUR supply noted in my opening summary. I remain a rally seller overall still. USDJPY: Capping at 147.80 then 147.50 but holding 146.80 in the latest retreats and now back up to 147.30. Jobbing pips gratefully banked again and I remain a rally seller as preferred side overall at these still elevated levels.
For more detailed analysis across a variety of pairs email mike@mspfx.co.uk
Interbank rates: 08.44 GMT
GBPUSD 1.2665
EURUSD 1.0921
EURGBP 0.8624
GBPEUR 1.1594
USDJPY 147.14
GBPJPY 186.34
GBPCAD 1.7204
GBPCHF 1.1067
GBPZAR 23.8420
GBPHKD 9.8543
USDCHF 0.8749
EURCHF 0.9554
EURHKD 8.4951
AUDUSD 0.6620
NZDUSD 0.6160
USDCAD 1.3605
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